read the case and answer the both questions.

Case 1.2 Your Integrated Case Advanced Automobile Concepts Nick Thomas is CEO of Advanced Automobile Concepts (AAC), a new division of a large automobile manufacturer, ZEN Motors. ZEN is a multinational manufacturer head- quartered in the United States. It has multiple divisions rep- resenting several auto and truck brands. ZEN's divisions have been slowly losing market share to other competitors. AAC was created to revive the aging ZEN automobile brands by either reengineering existing models or develop- ing totally new models that are more in tune with today's changing automobile market. Nick is very familiar with the automobile industry, as his entire adult life has been in the business. He follows trade publications carefully and believes ZEN's most sig. nificant losses are due to the growing popularity of several foreign brands, particularly brands from Japan and Korea. As CEO, Nick has been given the authority to do what he believes is needed to revive the company's brands and help return ZEN to prominence in automobile manufacturing, Nick has retrieved company sales data for all ZEN mod- els for the last decade from ZEN's internal reports system, part of ZEN's management information system (MIS). He has accessed the intelligence system to obtain trade industry articles written about the market, including evaluations of top competitors' models. He notices that several highly eval- uated models are small and fuel efficient. He also has rec- ognized that foreign competition has severely eroded ZEN'S market share of their only large, luxury car brand. ZEN's brand has been around for many years and now fails to com- pete with the newer luxury car models on the market. ZEN has been reluctant to move into the very small and highly fuel-efficient market for a couple of reasons. First, historically, ZEN has earned higher profits on larger vehi- cles. Every ZEN division has a large and extra-large model SUV. Historically these SUV models, ZEN's large trucks, and their larger family cars have been very profitable. Secondly, as sales have eroded in recent years, ZEN has been reluctant to invest the funds needed to develop radi- cally different designs from those models that have been their "bread and butter" cars for decades. However, in recent months ZEN's sales have plummeted as fuel prices have soared. ZEN management realizes they must innovate and that is why they created the AAC division Nick Thomas realizes that he must develop innova- tions in automobile design and engineering, but he is not certain in which direction he should guide his division. He realizes that, for now, oil prices are high and he understands the increases in sales of fuel-efficient gasoline, diesel, and electric hybrids. However, Nick has seen these environmental changes come and go. He tells his younger vice presidents, "When the crises are over, the car buying public wants big vehicles and we have earned our standing in the industry by giving the market what they want." Nick wonders to himself if this oil crisis is here to stay. He has also been concerned about the prospects of real global CASE 1.2 YOUR INTEGRATED CASE 19 warming. He's read the reports on climate change and is politicians of reducing foreign dependence on energy will confused-he doesn't know whether to believe Al Gore or be forgotten just as it has in the past. Nick is not sure what Rush Limbaugh. Nick also isn't certain about the future of will happen but he knows that continued high prices of fuel alternative fuels. Will the U.S. government really encour and increasing evidence of global warming will affect con- age the reduction of the country's dependence on foreign sumer behavior with regard to automobiles. energy? He vividly recalls this being an issue in the 1970s and President Carter calling for a switch to alternative fu 1. Should Nick Thomas use marketing research? els. He also knows that the country didn't follow through 2. What components of ZEN's marketing information on this at the time. Nick wonders if today's promises by system will Nick Thomas need